Daily Digest

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Daily Digest 8/24 - Illicit Gold, ACA Getting Expensive In Oklahoma

Wednesday, August 24, 2016, 8:10 AM


The Affordable Care Act is getting expensive in Oklahoma

The State of Oklahoma could face a healthcare crisis in 2017. There will only be one insurance company offering policies on the Healthcare Exchange and premiums are expected to go up by at least 50%. There are concerns that many who already have policies under the Affordable Care Act, will drop their coverage because of the costs.

IPERS fund, facing $5 billion shortfall, misses investment goal (Iowa)

Iowa's largest public employee pension fund has reported an investment return of 2.15 percent for the past state fiscal year, falling short of a key investment target and likely increasing long-term unfunded liabilities that already exceed $5 billion.

Emanuel eyes senior discount, more meters to soften tax hit (Chicago)

Last year, a first-ever garbage collection fee of $9.50 a month emerged as the biggest point of contention in Emanuel’s tax-laden 2016 budget — even more so than a $588 million property tax increase for police and fire pensions and school construction.

Solvency funding a growing challenge as B.C. pension deficits mount

British Columbia’s defined benefit pension plans continue to face funding challenges as solvency deficits mount, according to a report released last week by the Financial Institutions Commission of British Columbia.

$1.5 million spent to promote pension sales tax (Jacksonville)

While next Tuesday's election is called a primary, several races will be settled that day, including the fate of Duval County Referendum No. 1 -- asking voters to approve a half-cent sales tax to pay down the $2.7 billion deficit in Jacksonville employee pensions.

Illicit gold: India's smugglers shut out refiners, banks

The upsurge will lead to pressure for a reduction in the 10 percent import duty and a rethink on recently introduced levies on gold jewelry, which critics say are boosting the unofficial trade the government has been trying to curb.

Flood-Ravaged Louisiana Facing Biggest Cash Crunch Since 1980s

Louisiana, like other states dependent on energy production, has been forced to cut spending and raise taxes to close $2 billion of budget deficits in its current fiscal year as the price of oil has fallen to less than half the value it was two years ago, reducing state revenue. Alaska, Oklahoma and North Dakota are are among those contending with budget deficits since prices tumbled.

Saudi government to sell $5 billion worth of bonds

There are signs that Saudi banks are becoming less willing or able to buy government bonds as persistently low oil prices reduce the amount of spare cash they have available for such purchases. Saudi banks' holdings of government bonds increased by just 3.1 billion riyals month on month in June, a slower rise than in previous months, central bank figures show. Bankers say that because the bond offers are shrouded in secrecy, it is impossible to be sure how much debt the government is selling.

CPS wants approval for $1.5 billion in short-term loans (Chicago)

In addition to passing a $5.4 billion operating budget, approving up to $945 million in bonds for capital projects, and voting to raise property taxes by more than $250 million, Chicago’s Board of Education on Wednesday also will consider authorizing a 45 percent increase on Chicago Public Schools’ line of credit to $1.5 billion.

China's Best Bank Called 'Mirage' of Shadow Lending

The best-performing bank in China is in a struggling city in the northeast where weeds sprout alongside the concrete skeletons of high rises in an industrial zone that mostly looks like a ghost town.

ECB faces bulked-up govt bond buying if QE extended beyond March

This additional buying could compound liquidity problems that have created unpredictable price swings in the bond market, and the ECB might find it hard to source enough paper and keep within its purchase criteria in some countries - notably Ireland and Portugal where it has already scaled back transactions.

$1.3 trillion in student loan debt is crippling retail sales growth

Student debt obligations are growing faster than the average salaries for recent graduates, and require an estimated $160 billion in annual payments, according to new analysis from Moody's. That's $40 billion greater than Amazon's annual revenue, and is larger than the combined yearly sales of Home Depot and Lowe's.

Citi: Here Are Six Ways Central Banks Have Distorted Markets

In a research report last week, Citigroup Inc. credit analysts lamented this brave new world of "deeply dysfunctional" fixed-income and equity markets, citing, among other factors, the broken relationships between corporate profits and credit spreads, and the structural reduction of volatility despite a slew of macro headwinds.

Former Fed Staffer, Activists Detail Plan to Overhaul Central Bank

The regional Fed banks are unique among major central banks for being owned by local banks. Some fear this structure gives financial institutions undue sway over policy decisions. Fed bank presidents have countered this isn’t the case.

Bank of Japan's rush into stocks raises fears of market distortions

The BOJ's buying spree will make it harder for investors to sift good companies from bad, and raises a host of other problems including misallocating capital, making equities trading more speculative and reducing incentives for companies to meet shareholder needs, analysts say.

China caught in 'dead money' trap as central bank pleads for fiscal stimulus

China is at mounting risk of a Japanese-style "liquidity trap" as monetary policy loses traction and the economy approaches credit exhaustion, forcing a shift towards Keynesian fiscal stimulus.

Gold and Gemstones Pile Up in Singapore Vault on Quest for Haven

The stash of gold, silver and gems stored in the vaults and safe deposit boxes of Malca-Amit in Singapore has jumped almost 90 percent in the past year as wealthy investors seek a refuge in a world of negative interest rates, stagnating economies and political uncertainty.

Adviser to PM Abe: Japan needs 10 trillion yen stimulus in each of next two years

Japan should spend 10 trillion yen ($99.83 billion) on fiscal stimulus both in fiscal 2017 and in fiscal 2018 to offset a lack of demand in the economy and eliminate the risk of deflation, an adviser to Prime Minister Shinzo Abe said on Tuesday.

Fixing Pension Shortfalls in U.K. Means Disruption for Investors

The sheer size of the task has begun to transfix fund managers. Pension-industry estimates of defined-benefit retirement liabilities run from about 1.5 trillion pounds ($2 trillion) to more than 2.3 trillion pounds. Consultants and investors are proposing measures to ease the strain -- from issuing more gilts to adjusting how future liabilities are calculated.

Gold & Silver

Click to read the PM Daily Market Commentary: 8/23/16

Provided daily by the Peak Prosperity Gold & Silver Group

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Largest Oil Companies' Debts Hit Record High

Illinois governor's office warns of crippling pension payment hike

Reuters-18 hours ago
The country's fifth-largest state's unfunded pension liability stood at $111 billion at the end of fiscal 2015, with TRS accounting for more than 55 percent of that ...

Extra budget to push Japan FY 2016 outlays over ¥100 trillion

The Japan Times-2 hours ago
But it also underscores the government's reliance on debt despite its pledge to ... This fiscal year's initial and two supplementary budgets total ¥100.01 trillion, ...

CBO Boosts US Deficit Forecast on Tax-Revenue Slowdown

Wall Street Journal - ‎17 hours ago‎
WASHINGTON—A slowdown in tax receipts, especially from corporate profits, will cause the U.S. federal budget deficit to widen this year for the first time since 2009, while other forces will contain the growth rate of the national debt in coming years ...

Largest Oil Companies' Debts Hit Record High

Wall Street Journal-5 hours ago

The debt is piling up despite cuts of billions of dollars on new projects and current operations. Repaying the loans could weigh the companies down for years, .

Coeure: ECB may need to bolster its monetary stimulus programs if governments fail to act to boost their economies

Capital.gr (press release) - ‎4 hours ago‎
Speaking at an economics conference yesterday in Geneva, Mr. B. Coeure (ECB's Executive Board Member) reportedly said that the ECB may be forced to bolster its monetary stimulus programs if governments fail to act to boost their economies, while also ...

Yield Frenzy Blinds Investors to Risk of Sanctioned Russia Bonds

Bloomberg-6 hours ago
... developed-market sovereign debt turn negative. Though markets may have priced out sanctions risk for now, the disadvantages of Russian companies barred ...

Why Portugal could be Europe's next economic disaster

MarketWatch-49 minutes ago
While Portugal currently is far from those levels, it saw yields jump above 17% at the height of the eurozone sovereign debt crisis five years ago. As one of the ...

Another Portuguese bank needs help, this time for $5.7B

The Seattle Times-49 minutes ago
The bank will raise a further 1 billion euros through a debt issue. Since 2008 Portuguese authorities have already provided some 10 billion euros to four other ...

Scotland's North Sea oil revenue share fell 97% in one year, GERS ...

Herald Scotland-6 hours ago
Scotland's deficit has also grown from 9.1 per cent to 9.5 per cent, more than double the four per cent figure ... Scotland's onshore revenues grew by £1.9 billion.

Greece's State Debt Rises to €328.3 Bln

Greek Reporter-22 hours ago
206914-22-130827greekeconomydebt The bailout loan installment of 7.5 billion euros Greece received in July increased the country's sovereign debt to 328.3 ...

Derivatives Users Hit as Negative Rates Raise Collateral Costs

Bloomberg-6 hours ago
Derivatives users are the latest group to be hurt by negative interest rates as they get penalized for the cash they park at Europe's biggest clearinghouses.

Low oil prices, costly wildfire push Alberta's deficit to nearly $11-billion

The Globe and Mail-13 hours ago
Announcing that Alberta's deficit is now expected to grow to nearly $11-billion this year, Alberta Finance Minister Joe Ceci said the once debt-free province will ...

Low on cash, Pa. borrows to pay bills

Philly.com (blog)-22 hours ago
... has authorized borrowing up to $2.5 billion from auto-registration fees, lottery ... and General Assembly leaders left Pennsylvania with a $1.3 billion deficit.

You're fired! Venezuela orders purge of state workers who oppose Maduro.

Washington Post - ‎21 hours ago‎
High-ranking employees at Venezuelan state firms who oppose President Nicolás Maduro will face a steep price for their perceived disloyalty: their jobs. In what appears to be a sign of growing worry within the government that a recall push to oust ...
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